Nov. 1: New Jersey Gas Tax Increase Has Minimal Impact at the Pump

The 23 cents-per-gallon increase in the New Jersey state gas tax rate that took effect Nov. 1 did not result in a similar increase in the retail price of gasoline. According to AAA, the average price of regular gasoline in New Jersey rose half a cent per gallon between Oct. 31 and Nov. 1, from $2.037 to $2.042, an increase of 0.2 percent. The average price of regular gasoline remain unchanged over the same time period in neighboring New York ($2.38 per gallon) and fell by one-tenth of a cent in Pennsylvania ($2.397 to $2.396 per gallon) and Delaware ($2.078 to $2.077 per gallon).

This supports previous ARTBA-TIAC empirical research, which estimates that just over half of an increase in state gas taxes are passed through in the retail price of gasoline over a 30-day period. These findings have been further confirmed by seven state gas tax increases in July and August2015.

The main drivers of the retail price of gasoline include the price of crude oil, refining costs and profit margins, retail distribution costs and profit margins.

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